For Gordon Brown, the silver lining of the financial market implosion is massive and simple. The turmoil ensures that his leadership will not come under direct or sustained challenge at Labour's conference in Manchester next week. On the leadership question, Manchester will now offer a monumental study in collective hypocrisy, a connoisseur's display of untruth almost worthy of the annual conference of the North Korean Communist party. But it can't really last - and therefore it probably won't.

The stories that have forecast a bruising Labour conference for the prime minister were always mainly that - stories. Labour is certainly in private despair - but it is not about to commit public suicide. Not only are revolts much harder to launch and carry through in this era of ruthlessly managed conferences, but there is no significant section of the Labour party that wants it to happen in Manchester. Those who do want it to happen think this is not the time. Many remain determined that it should not happen at all. The only person who stands to gain from mayhem in Manchester is Brown himself - a point worth bearing in mind. If you read something improbably disloyal over the weekend, ask yourself who benefits?

On one level this rallying behind the Great Leader makes political sense. Even before the latest financial calamities, there was always a risk that another change of leader would turn the public even more solidly against Labour than it is already, especially when there is no pre-eminent replacement candidate. Now, as banks totter and assets plummet, a challenge to Brown risks looking out of touch, irresponsible, even frivolous. The political impact of the financial earthquake has barely made itself felt yet. After all, if this latest economic crunch frightens voters into demanding an experienced hand at the helm then - who knows? - we might even be on the verge of a Brown recovery. Or of a national government.

On another level, though, there is no logic here at all. What happens if, instead of turning to Brown to get us out of these troubles, the voters turn on him for getting us into them? The financial institutions that have sacrificed savings, investments and pensions to pay for greedy speculations, dividends and bonuses are, after all, the exact same institutions that Brown himself licensed, lionised and let off the leash.

By what logic, therefore, does this deregulator par excellence now claim to be the rectitudinous regulator, especially when his reputation for rectitude has taken such a massive hit over the 10p tax band abolition scandal? Yes, there is global turbulence, but the man who claims to be uniquely able to protect us from it is also the man who uniquely exposed us to it. He had a choice between strategies; he took one and rejected the other. There is no credit crunch taking place in Germany's more balanced mixed economy.

Loyalty always plays well in any party, and those who recall the Tony Benn era remember the price that the wilful absence of it can entail for Labour. But loyalty to a lost cause can be idiotic not heroic, and if there are more polls like this week's Ipsos-Mori survey, placing the Conservatives on 52% and Labour on 24%, then loyalty may soon seem like foolish denial. In any case, why should anyone in the party owe much loyalty to the most consistently disloyal Labour politician of modern times? Imagine the vicious briefing that would be taking place this weekend if Blair not Brown had been in No 10.

These are fluid and unpredictable times, and those who claim that Labour's course through them is clear are oversimplifying a situation of great complexity and considerable instability. Some political realities, though, have to be accommodated in any serious analysis. One is that Brown has been a dreadful leader, a man who promised change for the better and has delivered change for the worse. A second is that most Labour MPs and ministers - the people who really matter in this drama - hesitate to act. Their infirmity of purpose is a fact, in spite of the current drip-feed of individual revolts and resignations.

A third reality is that while some cabinet ministers - Jack Straw, David Miliband, Alan Johnson, perhaps Ed Balls, and maybe Jacqui Smith (described to me this week as "our Sarah Palin, the game-changer we need") - may carry a field marshal's baton in their knapsacks, all of them hold back. A fourth is that Labour is heading for a wipe out of historic proportions unless something changes. Talk to Labour MPs and ministers and the one clear thing is that the prime minister's future is unclear. These are times in which witnesses to the same event give starkly different accounts. Tuesday's cabinet meeting is a case in point. Some who sat round the table attended a blunt, impatient and even defiant gathering, which challenged Brown's refusal to face up to Labour's unpopularity. Others felt they had taken part in a constructive, notably unrancorous, exchange of views about the political situation.

For most Labour MPs, Brown remains a leader on probation. If there was a secret ballot on him today, he would be out. Since there is not, he has been allowed a relaunch, which has failed, a reshuffle, which has been postponed and which becomes increasingly complicated by his weakness, and a conference, which will support him with a show of unity.

Whether Brown can rise to the occasion on Tuesday - he is a grim speechmaker - or whether it makes much difference remains to be seen. Five or six cabinet ministers, perhaps more, none of them plotters and none of them looking for Brown's job, are ready to quit if someone senior gives a lead. A possible moment for that comes if Labour loses the Glenrothes byelection, probably on November 6: "It would be a disaster if we hold the seat," a senior Labour critic of the prime minister confessed this week.

Brown has few rolls of the dice left. Yet the inertia factor still matters. Do nothing and things probably won't get any worse, terrible though they already are, many seem to feel. And then there's fear of the unknown. How would the markets, in their current febrile state, react to the ousting of a man of such governmental experience? Brown's chances of leading Labour into the next election are running out. But market turmoil has offered him a lifeline this week - and it may do so again. martin.kettle@theguardian.com